Sea surface temperature (SST) is a fundamental driver of tropical weather systems such as monsoon rainfall and tropical cyclones. However, understanding of the factors that control SST variability is lacking, especially during the monsoons when in situ observations are sparse. Here we use a ground-breaking observational approach to determine the controls on the SST variability in the southern Bay of Bengal. We achieve this through the first full closure of the ocean mixed layer energy budget derived entirely from in situ observations during the Bay of Bengal Boundary Layer Experiment (BoBBLE). Locally measured horizontal advection and entrainment contribute more significantly than expected to SST evolution and thus oceanic variability during the observation period. These processes are poorly resolved by state-of-the-art climate models, which may contribute to poor representation of monsoon rainfall variability. The novel techniques presented here provide a blueprint for future observational experiments to quantify the mixed layer heat budget on longer time scales and to evaluate these processes in models.